What Does Microsoft's Acquisition of LinkedIn Mean for LinkedIn?

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In a huge, and largely unexpected, move, Microsoft has today announced that it will acquire LinkedIn for $26.2 billion. The move gives Microsoft a boost in the CRM space, making it more competitive with Salesforce (which Microsoft also reportedly tried to purchase last year). Under the deal, LinkedIn will keep its branding and product and become part of Microsoft's productivity and business segment, with LinkedIn CEO Jeff Weiner reporting to Microsoft CEO Satya Nadella.

There's a heap of ways in which the new acquisition could help and change both platforms. Microsoft, for their part, is focused on software, with this acquisition most obviously impacting on their CRM division - within which they're currently only second to Salesforce in the market. Integrating LinkedIn's professional services and networks will give them a big boost in this regard.

"LinkedIn will give Microsoft far bigger reach in terms of social networking services and professional content - developing the early signs of enterprise social networking that it kicked off with its acquisition of Yammer for $1.2 billion in 2012."

"This is the logical next step to take. We believe we can make LinkedIn the social fabric for all of Office."

In terms of LinkedIn, and what may change at the professional social network, LinkedIn CEO Jeff Weiner sent a letter to all LinkedIn Staff which outlined some of the potential opportunities, including:

"Massively scaling the reach and engagement of LinkedIn by using the network to power the social and identity layers of Microsoft's ecosystem of over one billion customers. Think about things like LinkedIn's graph interwoven throughout Outlook, Calendar, Active Directory, Office, Windows, Skype, Dynamics, Cortana, Bing and more."

This was also noted in a slide deck which highlights the key benefits of the pairing.

Integrating LinkedIn's professional network with Microsoft's professional software and services is the most obvious and logical pairing of the two. Expect to see a lot more integration between Microsoft products and LinkedIn - and, likely, less integration with non-Microsoft applications and systems.

"Accelerating our objective to transform learning and development by deeply integrating the Lynda.com Learning solution in Office alongside some of the most popular productivity apps on the planet (note: 6 of the top 25 most popularLynda.com courses are related to Microsoft products)."

This is where Microsoft will see real, immediate value. As LinkedIn, and their 433 million members, move more into offering training solutions and tools, Microsoft will now be able to align with those efforts to help boost the use of Microsoft products. Not only that, but Microsoft will now have a new avenue to connect with users - through their own social network. While they already have internal social systems like Yammer for such a purpose, they don't have anything on the scale of LinkedIn.

"Realizing LinkedIn's full potential to truly change the way the world works by partnering with Microsoft to innovate on solutions within the enterprise that are ripest for disruption, e.g., the corporate directory, company news dissemination, collaboration, productivity tools, distribution of business intelligence and employee voice, etc."

One way in which this element could be used is via Microsoft's 'Cortana' digital assistant. As highlighted in the slide pack, Cortana could be integrated with your LinkedIn presence to enable voice reminders or updates ahead of meetings.

"Expanding beyond recruiting and learning & development to create value for any part of an organization involved with hiring, managing, motivating or leading employees. This human capital area is a massive business opportunity and an entirely new one for Microsoft."

As we've noted before, one of the biggest areas of potential growth for LinkedIn is in recruiting, in using their unmatched database of career and educational histories to create better ways to match people to jobs. For example, LinkedIn can already predict a person's likely career path based on their education, background and interests. The system can do this by matching those data points against all the other, similar profiles in the system and coming up with commonalities and probable outcomes.

Now imagine that on a larger scale. Imagine that, one day, you might be able to log onto LinkedIn in your teen years, enter in your interests and other qualifying data, and have the system show you your likely ideal career path. LinkedIn's already doing this to some degree, via their 'University Finder' tool. The next level will be constructing a system that helps job seekers find their ideal roles, and helps employers make the right decisions on new hires. No one is close to LinkedIn on this front. And with the additional resources of Microsoft, the platform really could change recruitment as we know it.

There'll obviously also be new opportunities for Sponsored Content (integrated with Microsoft's products) and additional partnership opportunities through the combined LinkedIn and Microsoft networks.

How the whole thing will come together, no one knows for sure at this stage - I'd hazard a guess that not even LinkedIn or Microsoft know for sure, but the opportunities are significant. One thing that is clear is that Microsoft will be getting a big boost to their CRM services, with a massive amount of new professional insights and data coming into their stream, insights that can't be matched by their competitors.

And for LinkedIn, they get the backing of a big corporation to help them evolve and grow, which will enable them to refine and update their services and become an even bigger player in the market. The deal could, of course, go south and impact on what LinkedIn does best, but the opportunity is there for both companies to build something great.